Verified Document

20x0 20x1 December January February March 1st Term Paper

20x0 20x1 December January February March 1st quarter a) Sales budget Total sales 400,000 440,000 484,000 532,400 1,456,400 Cash sales 100,000 110,000 121,000 133,100 364,100 Sales on account 300,000 330,000 363,000 399,300 1,092,300 20x0 20x1 b) Cash receipts budget December January February March 1st quarter Cash sales 110,000 121,000 133,100 364,100 Cash collections from credit sales made during current month 33,000 36,300 39,930 109,230 Cash collections from credit sales made during previous month 270,000 297,000 326,700 893,700 Total cash receipts 413,000 454,300 499,730 1,367,030 20x0 20x1 c) Purchases budget December January February March 1st quarter Budgeted cost of goods sold 280,000 308,000 338,800 372,680 1,019,480 Add: Desired ending inventory 154,000 169,400 186,340 186,340 1,995,560 Total goods needed 434,000 477,400 525,140 559,020 3,015,040 Less: expected beginning inventory (140,000) (154,000) (169,400) (186,340) (509,740) Purchases 294,000 323,400 355,740 372,680 2,505,300 20x0 20x1 d) Cash disbursement budget December January February March 1st quarter Inventory purchases Cash payments from purchases during the current month 129,360 142,296 149,072 420,728 Cash payments from purchases during the preceding month 176,400 194,040 213,444 583,884 Total cash payments for inventory purchases 305,760 336,336 362,516 1,004,612 Other expenses Sales salaries 21,000 21,000 21,000 63,000 Advertising and production 16,000 16,000 16,000 48,000 Administrative salaries 21,000 21,000 21,000 63,000 Interest on bonds 15,000 0-0-15,000 Property taxes 0-5,400 0-5,400 Sales commissions 4,400 4,840 5,324 14,564 Total cash payments for other purchases 77,400 68,240 63,324 208,964 Total cash disbursements 383,160 404,576 425,840 1,213,576

20x0 20x1 e) Summary cash budget December January February March 1st quarter Cash receipts 413,000 454,300 499,730 1,367,030 Less: Cash disbursements (383,160) (404,576) (425,840) (1,213,576) Changes in cash balance during period due to operations 29,840 49,724 73,890 153,454 Sale of marketable securities (1/2/x1) 15,000 0-0-15,000 Proceeds from bank loan (1/2/x1) 100,000 0-0 100,000 Purchase of equipment (125,000) 0-0 (125,000) Repayment of bank loan (3/31/x1) 0 (100,000) (100,000) Interest in bank loan 0 (2,500) (2,500)...

One of the advantages is that a comparison may be made between the actual performance of a company and the budgeted performance.
Another advantage budgeting is that is confers managers increased control on the business, based on variance analysis. Noticing unfavorable variances may trigger certain responses, which have the capacity to solve the already existing problems and to prevent future ones from appearing. For instance, if costs are too high, waste may be cut out or an expensive supplier might be changed. Should the sales be too low, a supplementary effort in advertising, promotion or sales could prove useful. If there is a problem with low…

Sources used in this document:
Reference:

1. The Times - Budgeting Theory Basics www.thetimes100.co.uk/theory/theory.php?tID=220

The Times - Budgeting Theory Basics www.thetimes100.co.uk/theory/theory.php?tID=220
Cite this Document:
Copy Bibliography Citation

Related Documents

Hilton Culture the Hilton Worldwide:
Words: 517 Length: 2 Document Type: Essay

Here, Hilton's locations not just in mainland China but in various locations throughout the globe have joined forces in creating a distinctly Chinese hospitality experience for visitors. Accordingly, the Hilton Huanying program is designed to demonstrate Hilton's recognition of Chinese cultural predilections when traveling at home or abroad. The program promotes "a tailored experience for Chinese travelers to welcome them to Hilton Worldwide properties, and expanded the program to

Hilton/Chile Chile -- the World's
Words: 1697 Length: 6 Document Type: Term Paper

One final possible advantage offered by Chile would be another new development in the travel industry, which is community-service oriented travel. The Hilton Corporation could work with the Chilean government to create programs whereby travelers could help provide assistance to certain needy populations and areas of the region, possibly even in areas not traditionally known of by tourists. This would satisfy a potential desire for adventure in the hearts of

Hilton Hotels' Management Strengths and
Words: 2538 Length: 9 Document Type: Thesis

These best practices or optimized approaches to first measuring guest expectations and then responding to them through a series of concerted strategies is the foundation of the strategic framework Hilton uses to manage its many brands (Dube, Renagham,1999). Managing Expectations and Exceeding Them: The Mission of Hilton Management Strategically then, the managing and exceeding of expectations are the most critical strategic set of processes that Hilton management continually refines and accentuates

Hilton Should Open a Hotel
Words: 1090 Length: 4 Document Type: Business Proposal

However, the foreign investment climate has improved significantly in recent years, especially with respect to hotel development, including in Phnom Penh. A new system for lease registration has been developed that effectively allows for registering land titles, allowing foreign entities to take out 99-year leases on property, which otherwise would be subject to foreign ownership restrictions. Those restrictions on foreign ownership of land have stifled foreign direct investment in the

Hilton Website the Hilton Hotels
Words: 313 Length: 1 Document Type: Term Paper

Policies and procedures for the Hilton include corporate responsibility, community involvement, support of the arts, and a variety of public service policies that enhance the company's public persona. The company mission stresses accountability, profitability, and corporate responsibility. The 2005 Annual Report indicates profitability at 7% from last year, with Net Income up 93%. It was one of the best years for Hilton in quite a while, and the company continues to

Westward Hilton
Words: 1134 Length: 3 Document Type: Case Study

Westward Hilton The previous managers of the Westward Hilton modeled their belief statement after the credo of another hotel, the Ritz-Carlton. Unfortunately, that credo did not work well for the Westward Hilton, and was not a good fit. One company is not the same as another, even though they may provide the same basic services (Belch & Belch, 2006). The Ritz-Carlton has brand name recognition, for example, where the Westward Hilton

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now